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|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|             | CRM/NMD |   | CV/AF |   | Other |   | Total |
| Fiscal Year 2012 |   |  |   |   |  |   |   |  |   |   |  |
| Net sales        | $ | 3,277 |  |   | $ | 2,226 |  |   | $ | — |  |   | $ | 5,503 |  |
| Operating profit | 2,185 |  |   | 1,241 |  |   | (2,326 | ) |   | 1,100 |  |
| Fiscal Year 2011 |   |  |   |   |  |   |   |  |   |   |  |
| Net sales        | $ | 3,453 |  |   | $ | 2,159 |  |   | $ | — |  |   | $ | 5,612 |  |
| Operating profit | 2,145 |  |   | 1,144 |  |   | (2,174 | ) |   | 1,115 |  |
| Fiscal Year 2010 |   |   |   |   |   |   |   |
| Net sales        | $ | 3,420 |  |   | $ | 1,744 |  |   | $ | — |  |   | $ | 5,164 |  |
| Operating profit | 2,125 |  |   | 968 |  |   | (1,817 | ) |   | 1,276 |  |

|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)     | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 % Change |   | 2011 vs. 2010 % Change |
| ICD systems       | $ | 1,743 |  |   | $ | 1,824 |  |   | $ | 1,820 |  |   | (4.4 | )% |   | 0.2 |  % |
| Pacemaker systems | 1,111 |  |   | 1,210 |  |   | 1,220 |  |   | (8.2 | )% |   | (0.8 | )% |
|              | $ | 2,854 |  |   | $ | 3,034 |  |   | $ | 3,040 |  |   | (5.9 | )% |   | (0.2 | )% |

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|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)             | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 % Change |   | 2011 vs. 2010 % Change |
| Vascular products         | $ | 716 |  |   | $ | 740 |  |   | $ | 672 |  |   | (3.2 | )% |   | 10.1 | % |
| Structural heart products | 612 |  |   | 597 |  |   | 364 |  |   | 2.5 |  % |   | 64.0 | % |
|                      | $ | 1,328 |  |   | $ | 1,337 |  |   | $ | 1,036 |  |   | (0.7 | )% |   | 29.1 | % |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 % Change |   | 2011 vs. 2010 % Change |
| Atrial fibrillation products | $ | 898 |  |   | $ | 822 |  |   | $ | 708 |  |   | 9.2 | % |   | 16.1 | % |

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|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)            | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 % Change |   | 2011 vs. 2010 % Change |
| Neuromodulation products | $ | 423 |  |   | $ | 419 |  |   | $ | 380 |  |   | 1.0 | % |   | 10.3 | % |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions)                           | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 %Change |   | 2011 vs. 2010 %Change |
|      Net sales | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |   | (1.9 | )% |   | 8.7 | % |

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|               |
|---------------|
|               |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales     | 2012 |   | 2011 |   | 2010 |
| United States | $ | 2,594 |  |   | $ | 2,648 |  |   | $ | 2,655 |  |
| International |   |   |   |  |   |   |  |
| Europe        | 1,432 |  |   | 1,559 |  |   | 1,314 |  |
| Japan         | 665 |  |   | 641 |  |   | 553 |  |
| Asia Pacific  | 456 |  |   | 416 |  |   | 324 |  |
| Other         | 356 |  |   | 348 |  |   | 318 |  |
|          | 2,909 |  |   | 2,964 |  |   | 2,509 |  |
|          | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |

|                         |
|-------------------------|
|                         |  |  |  |  |  |  |  |  |  |  |  |
| Gross profit            |   |  |   |   |  |   |   |
| (in millions)           | 2012 |   | 2011 |   | 2010 |
| Gross profit            | $ | 3,965 |  |   | $ | 4,079 |  |   | $ | 3,754 |  |
| Percentage of net sales | 72.1 | % |   | 72.7 | % |   | 72.7 | % |

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |  |  |  |
| Selling, general and administrative (SG&A) expense |   |  |   |   |  |   |   |
| (in millions)                                          | 2012 |   | 2011 |   | 2010 |
| Selling, general and administrative                    | $ | 1,891 |  |   | $ | 2,084 |  |   | $ | 1,818 |  |
| Percentage of net sales                                | 34.4 | % |   | 37.1 | % |   | 35.2 | % |

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|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |
| Research and development (R&D) expense |   |  |   |   |  |   |   |
| (in millions)                              | 2012 |   | 2011 |   | 2010 |
| Research and development expense           | $ | 676 |  |   | $ | 705 |  |   | $ | 631 |  |
| Percentage of net sales                    | 12.3 | % |   | 12.6 | % |   | 12.2 | % |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |
| Purchased in-process research and development charges |   |   |   |   |   |
| (in millions)                                         | 2012 |   | 2011 |   | 2010 |
| Purchased in-process research and development charges | $ | — |  |   | $ | 4 |  |   | $ | 12 |  |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |
| Special charges               |   |  |   |   |  |   |   |
| (in millions)                 | 2012 |   | 2011 |   | 2010 |
| Cost of sales special charges | $ | 93 |  |   | $ | 47 |  |   | $ | 28 |  |
| Special charges               | 298 |  |   | 171 |  |   | 17 |  |
|                          | $ | 391 |  |   | $ | 218 |  |   | $ | 45 |  |

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|                             |
|-----------------------------|
|                             |  |  |  |  |  |  |  |  |  |  |  |
| Other income (expense), net |   |   |   |   |   |
| (in millions)               | 2012 |   | 2011 |   | 2010 |
| Interest income             | $ | 5 |  |   | $ | 4 |  |   | $ | 2 |  |
| Interest expense            | (73 | ) |   | (70 | ) |   | (67 | ) |
| Other                       | (27 | ) |   | (30 | ) |   | (3 | ) |
|                        | $ | (95 | ) |   | $ | (96 | ) |   | $ | (68 | ) |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |
| (as a percent of pre-tax income) | 2012 |   | 2011 |   | 2010 |
| Effective tax rate               | 25.2 | % |   | 19.0 | % |   | 24.9 | % |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions, except per share amounts) | 2012 |   | 2011 |   | 2010 |   | 2012 vs. 2011 %Change |   | 2011 vs. 2010 %Change |
| Net earnings                            | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |   | (9.0 | )% |   | (8.9 | )% |
| Diluted net earnings per share          | $ | 2.39 |  |   | $ | 2.52 |  |   | $ | 2.75 |  |   | (5.2 | )% |   | (8.4 | )% |

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|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |
|                                                                  | 2012 |   | 2011 |   | 2010 |
| Net cash provided by (used in):                                       |   |   |   |   |   |
| Operating activities                                                  | $ | 1,335 |  |   | $ | 1,287 |  |   | $ | 1,274 |  |
| Investing activities                                                  | (313 | ) |   | (337 | ) |   | (1,081 | ) |
| Financing activities                                                  | (813 | ) |   | (456 | ) |   | (86 | ) |
| Effect of currency exchange rate changes on cash and cash equivalents | (1 | ) |   | (8 | ) |   | — |  |
| Net increase in cash and cash equivalents                             | $ | 208 |  |   | $ | 486 |  |   | $ | 107 |  |

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|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |
| Board of Directors’Dividend Authorization Date | Shareholders’Record Date | DividendPayable Date | Cash DividendsDeclaredPer Share |
| February 24, 2012                                    | March 30, 2012 | April 30, 2012 | $ | 0.23 |  |
| May 2, 2012                                          | June 29, 2012 | July 31, 2012 | 0.23 |  |
| August 1, 2012                                       | September 28, 2012 | October 31, 2012 | 0.23 |  |
| December 11, 2012                                    | December 31, 2012 | January 31, 2013 | 0.23 |  |
| Total dividends declared per share during 2012       |   |   | $ | 0.92 |  |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |  |  |  |
| Board of Directors’Dividend Authorization Date | Shareholders’Record Date | DividendPayable Date | Cash DividendsDeclaredPer Share |
| February 26, 2011                                    | March 31, 2011 | April 29, 2011 | $ | 0.21 |  |
| May 11, 2011                                         | June 30, 2011 | July 29, 2011 | 0.21 |  |
| August 2, 2011                                       | September 30, 2011 | October 31, 2011 | 0.21 |  |
| December 13, 2011                                    | December 30, 2011 | January 31, 2012 | 0.21 |  |
| Total dividends declared per share during 2011       |   |   | $ | 0.84 |  |

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|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | Payments Due by Period |
|                                        |   | Less than | 1-3 | 3-5 | More than |
|                                        | Total | 1 Year | Years | Years | 5 Years |
| Contractual obligations related to          |   |   |   |   |   |
| off-balance sheet arrangements:             |   |   |   |   |   |
|  Operating leases                      | $ | 125 |  | $ | 37 |  | $ | 49 |  | $ | 30 |  | $ | 9 |  |
|  Purchase commitments (a)              | 431 |  | 377 |  | 47 |  | 5 |  | 2 |  |
|  Contingent consideration payments (b) | 78 |  | 51 |  | 26 |  | 1 |  | — |  |
|    Total                     | 634 |  | 465 |  | 122 |  | 36 |  | 11 |  |
|                                        |   |   |   |   |   |
| Contractual obligations reflected           |   |   |   |   |   |
| in the balance sheet:                       |   |   |   |   |   |
|  Debt obligations (c)                  | 3,343 |  | 591 |  | 1,390 |  | 655 |  | 707 |  |
|    Total                     | $ | 3,977 |  | $ | 1,056 |  | $ | 1,512 |  | $ | 691 |  | $ | 718 |  |

|        |
|--------|
|        |  |  |  |
|   | (a) |   | These amounts include commitments for inventory purchases and capital expenditures that do not exceed our projected requirements and are in the normal course of business. The purchase commitment amounts do not represent the entire anticipated purchases and capital expenditures in the future, but only those for which we are contractually obligated. |

|        |
|--------|
|        |  |  |  |
|   | (b) |   | These amounts include contingent commitments to acquire various businesses involved in the distribution of our products and other contingent acquisition consideration payments. In connection with certain acquisitions, we may agree to provide additional consideration payments upon the achievement of certain product development milestones, which may include but are not limited to: successful levels of achievement in clinical trials and certain product regulatory approvals. We may also provide for additional consideration payments to be made upon the achievement of certain levels of future product sales. While it is not certain if and/or when these payments will be made, we have included the payments in the table based on our best estimates of the dates when we expect the milestones and/or contingencies will be met. |

|        |
|--------|
|        |  |  |  |
|   | (c) |   | Includes current debt obligations, scheduled maturities of long-term debt and scheduled interest payments (inclusive of interest rate swap payments). See Note 4 to the Consolidated Financial Statements for additional information on our debt obligations. |

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|    |
|----|
|    |  |  |
| 1  | . | Any legislative or administrative reform to the U.S. Medicare or Medicaid systems or international reimbursement systems that significantly reduces reimbursement for procedures using our medical devices or denies coverage for such procedures, as well as adverse decisions relating to our products by administrators of such systems on coverage or reimbursement issues. |
| 2  | . | Assertion, acquisition or grant of key patents by or to others that have the effect of excluding us from market segments or requiring us to pay royalties. |
| 3  | . | Economic factors, including inflation, contraction in capital markets, changes in interest rates and changes in foreign currency exchange rates. |
| 4  | . | Product introductions by competitors that have advanced technology, better features or lower pricing. |
| 5  | . | The loss of, or price increases by, suppliers of key components, some of which are sole-sourced. |
| 6  | . | A reduction in the number of procedures using our devices caused by cost-containment pressures, publication of adverse study results, initiation of investigations of our customers related to our devices or the development of or preferences for alternative therapies. |
| 7  | . | Safety, performance or efficacy concerns about our products, many of which are expected to be implanted for many years, some of which may lead to recalls and/or advisories with the attendant expenses and declining sales. |
| 8  | . | Declining industry-wide sales caused by product quality issues or recalls or advisories by us or our competitors that result in loss of physician and/or patient confidence in the safety, performance or efficacy of sophisticated medical devices in general and/or the types of medical devices recalled in particular. |
| 9  | . | Changes in laws, regulations or administrative practices affecting government regulation of our products, such as FDA regulations, including those that decrease the probability or increase the time and/or expense of obtaining approval for products or impose additional burdens on the manufacture and sale of medical devices. |
| 10 | . | Regulatory actions arising from concern over Bovine Spongiform Encephalopathy, sometimes referred to as “mad cow disease,” that have the effect of limiting our ability to market products using bovine collagen, such as Angio-Seal™, or products using bovine pericardial material, such as our Biocor®, Epic™ and Trifecta™ tissue heart valves, or that impose added costs on the procurement of bovine collagen or bovine pericardial material. |
| 11 | . | Our ability to fund future product liability losses related to claims made subsequent to becoming self-insured. |
| 12 | . | Severe weather or other natural disasters that can adversely impact customers purchasing patterns and/or patient implant procedures or cause damage to the facilities of our critical suppliers or one or more of our facilities, such as an earthquake affecting our facilities in California or a hurricane affecting our facilities in Puerto Rico. |
| 13 | . | Healthcare industry changes leading to demands for price concessions and/or limitations on, or the elimination of, our ability to sell in significant market segments. |
| 14 | . | Adverse developments in investigations and governmental proceedings. |
| 15 | . | Adverse developments in litigation, including product liability litigation, patent or other intellectual property litigation, qui tam litigation or shareholder litigation. |
| 16 | . | Inability to successfully integrate the businesses that we have acquired in recent years and that we plan to acquire. |
| 17 | . | Failure to successfully complete or unfavorable data from clinical trials for our products or new indications for our products and/or failure to successfully develop markets for such new indications. |
| 18 | . | Changes in accounting rules or tax laws that adversely affect our results of operations, financial position or cash flows. |
| 19 | . | The disruptions in the financial markets and the economic downturn that adversely impact the availability and cost of credit and customer purchasing and payment patterns, including the collectability of customer accounts receivable. |
| 20 | . | Conditions imposed in resolving, or any inability to timely resolve, any regulatory issues raised by the FDA, including Form 483 observations or warning letters, as well as risks generally associated with our regulatory compliance and quality systems. |
| 21 | . | Governmental legislation, including the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, and/or regulation that significantly impacts the healthcare system in the United States or in international markets and that results in lower reimbursement for procedures using our products, reduces medical procedure volumes or otherwise adversely affects our business and results of operations, including the U.S. medical device excise tax. |
| 22 | . | Our inability to realize the expected benefits from our restructuring initiatives and continuous improvement efforts and the negative unintended consequences such activity could have. |
| 23 | . | Our inability to maintain, protect and enhance our existing information technology systems and to develop new systems. |

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|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                     | December 29, 2012 |   | December 31, 2011 |   | January 1, 2011 |
| Net sales                                             | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |
| Cost of sales:                                        |   |  |   |   |  |   |   |
| Cost of sales before special charges                  | 1,445 |  |   | 1,486 |  |   | 1,382 |  |
| Special charges                                       | 93 |  |   | 47 |  |   | 28 |  |
| Total cost of sales                                   | 1,538 |  |   | 1,533 |  |   | 1,410 |  |
| Gross profit                                          | 3,965 |  |   | 4,079 |  |   | 3,754 |  |
| Selling, general and administrative expense           | 1,891 |  |   | 2,084 |  |   | 1,818 |  |
| Research and development expense                      | 676 |  |   | 705 |  |   | 631 |  |
| Purchased in-process research and development charges | — |  |   | 4 |  |   | 12 |  |
| Special charges                                       | 298 |  |   | 171 |  |   | 17 |  |
| Operating profit                                      | 1,100 |  |   | 1,115 |  |   | 1,276 |  |
| Other income (expense), net                           | (95 | ) |   | (96 | ) |   | (68 | ) |
| Earnings before income taxes                          | 1,005 |  |   | 1,019 |  |   | 1,208 |  |
| Income tax expense                                    | 253 |  |   | 193 |  |   | 301 |  |
| Net earnings                                          | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |
| Net earnings per share:                               |   |  |   |   |  |   |   |
| Basic                                                 | $ | 2.40 |  |   | $ | 2.55 |  |   | $ | 2.76 |  |
| Diluted                                               | $ | 2.39 |  |   | $ | 2.52 |  |   | $ | 2.75 |  |
| Cash dividends declared per share:                    | $ | 0.92 |  |   | $ | 0.84 |  |   | $ | — |  |
| Weighted average shares outstanding:                  |   |  |   |   |  |   |   |
| Basic                                                 | 313.3 |  |   | 324.3 |  |   | 328.2 |  |
| Diluted                                               | 314.8 |  |   | 327.1 |  |   | 330.5 |  |

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|                                                                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                             |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                                                                                           | December 29, 2012 |   | December 31, 2011 |   | January 1, 2011 |
| Net earnings                                                                                                                | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |
| Other comprehensive income (loss), net of tax:                                                                              |   |  |   |   |  |   |   |
| Unrealized gain on available-for-sale securities, net of taxes of $1 million, $2 million and $2 million, respectively       | 10 |  |   | 3 |  |   | 6 |  |
| Reclassification of realized gain on available-for-sale securities, net of taxes of $6 million and $2 million, respectively | (8 | ) |   | — |  |   | (3 | ) |
| Foreign currency translation adjustment, net of taxes                                                                       | 28 |  |   | (71 | ) |   | (13 | ) |
| Other comprehensive income (loss)                                                                                           | 30 |  |   | (68 | ) |   | (10 | ) |
| Total comprehensive income                                                                                                  | $ | 782 |  |   | $ | 758 |  |   | $ | 897 |  |

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|                                                                                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                   |  |  |  |  |  |  |  |
|                                                                                                                                                                              | December 29, 2012 |   | December 31, 2011 |
| ASSETS                                                                                                                                                                            |   |  |   |   |  |
| Current Assets                                                                                                                                                                    |   |  |   |   |  |
| Cash and cash equivalents                                                                                                                                                         | $ | 1,194 |  |   | $ | 986 |  |
| Accounts receivable, less allowance for doubtful accounts                                                                                                                         | 1,349 |  |   | 1,367 |  |
| Inventories                                                                                                                                                                       | 610 |  |   | 624 |  |
| Deferred income taxes, net                                                                                                                                                        | 220 |  |   | 225 |  |
| Other current assets                                                                                                                                                              | 178 |  |   | 182 |  |
| Total current assets                                                                                                                                                              | 3,551 |  |   | 3,384 |  |
| Property, Plant and Equipment                                                                                                                                                     |   |   |   |
| Land, building and improvements                                                                                                                                                   | 602 |  |   | 528 |  |
| Machinery and equipment                                                                                                                                                           | 1,603 |  |   | 1,546 |  |
| Diagnostic equipment                                                                                                                                                              | 424 |  |   | 380 |  |
| Property, plant and equipment at cost                                                                                                                                             | 2,629 |  |   | 2,454 |  |
| Less accumulated depreciation                                                                                                                                                     | (1,204 | ) |   | (1,066 | ) |
| Net property, plant and equipment                                                                                                                                                 | 1,425 |  |   | 1,388 |  |
| Goodwill                                                                                                                                                                          | 2,961 |  |   | 2,953 |  |
| Intangible assets, net                                                                                                                                                            | 804 |  |   | 856 |  |
| Other assets                                                                                                                                                                      | 530 |  |   | 537 |  |
| TOTAL ASSETS                                                                                                                                                                      | $ | 9,271 |  |   | $ | 9,118 |  |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                        |   |  |   |   |  |
| Current Liabilities                                                                                                                                                               |   |  |   |   |  |
| Current debt obligations                                                                                                                                                          | $ | 530 |  |   | $ | 83 |  |
| Accounts payable                                                                                                                                                                  | 254 |  |   | 202 |  |
| Dividends payable                                                                                                                                                                 | 68 |  |   | 67 |  |
| Income taxes payable                                                                                                                                                              | 142 |  |   | 1 |  |
| Employee compensation and related benefits                                                                                                                                        | 299 |  |   | 305 |  |
| Other current liabilities                                                                                                                                                         | 482 |  |   | 403 |  |
| Total current liabilities                                                                                                                                                         | 1,775 |  |   | 1,061 |  |
| Long-term debt                                                                                                                                                                    | 2,550 |  |   | 2,713 |  |
| Deferred income taxes, net                                                                                                                                                        | 323 |  |   | 392 |  |
| Other liabilities                                                                                                                                                                 | 529 |  |   | 477 |  |
| Total liabilities                                                                                                                                                                 | 5,177 |  |   | 4,643 |  |
| Commitments and Contingencies (Note 5)                                                                                                                                            | — |  |   | — |  |
| Shareholders’ Equity                                                                                                                                                        |   |  |   |   |  |
| Preferred stock ($1.00 par value; 25,000,000 shares authorized; none outstanding)                                                                                                 | — |  |   | — |  |
| Common stock ($0.10 par value; 500,000,000 shares authorized; 295,648,327 and 319,615,965 shares issued and outstanding at December 29, 2012 and December 31, 2011, respectively) | 30 |  |   | 32 |  |
| Additional paid-in capital                                                                                                                                                        | — |  |   | 43 |  |
| Retained earnings                                                                                                                                                                 | 4,018 |  |   | 4,384 |  |
| Accumulated other comprehensive income (loss):                                                                                                                                    |   |  |   |   |  |
| Cumulative translation adjustment                                                                                                                                                 | 26 |  |   | (2 | ) |
| Unrealized gain on available-for-sale securities                                                                                                                                  | 20 |  |   | 18 |  |
| Total shareholders’ equity                                                                                                                                                  | 4,094 |  |   | 4,475 |  |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                  | $ | 9,271 |  |   | $ | 9,118 |  |

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|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                       |   |   |   | Accumulated |   |
|                                       | Common Stock | Additional |   | Other | Total |
|                                       | Number of |   | Paid-In | Retained | Comprehensive | Shareholders' |
|                                       | Shares | Amount | Capital | Earnings | Income (Loss) | Equity |
| Balance at January 2, 2010                 | 324,537,581 |  | $ | 33 |  | $ | 6 |  | $ | 3,192 |  | $ | 94 |  | $ | 3,325 |  |
| Comprehensive income:                      |   |   |   |   |   |   |
| Net earnings                               |   |   |   | 907 |  |   | 907 |  |
| Other comprehensive loss                   |   |   |   |   | (10 | ) | (10 | ) |
| Total comprehensive income                 |   |   |   |   |   | 897 |  |
| Repurchases of common stock                | (15,388,500 | ) | (2 | ) | (623 | ) |   |   | (625 | ) |
| Stock-based compensation                   |   |   | 70 |  |   |   | 70 |  |
| Common stock issued under stock            |   |   |   |   |   |   |
|   plans and other, net           | 6,293,732 |  | 1 |  | 151 |  |   |   | 152 |  |
| Common stock issued in                     |   |   |   |   |   |   |
|   connection with an acquisition | 13,575,353 |  | 1 |  | 532 |  |   |   | 533 |  |
| Tax benefit from stock plans               |   |   | 20 |  |   |   | 20 |  |
| Balance at January 1, 2011                 | 329,018,166 |  | 33 |  | 156 |  | 4,099 |  | 84 |  | 4,372 |  |
| Comprehensive income:                      |   |   |   |   |   |   |
| Net earnings                               |   |   |   | 826 |  |   | 826 |  |
| Other comprehensive loss                   |   |   |   |   | (68 | ) | (68 | ) |
| Total comprehensive income                 |   |   |   |   |   | 758 |  |
| Cash dividends declared                    |   |   |   | (272 | ) |   | (272 | ) |
| Repurchases of common stock                | (18,314,774 | ) | (2 | ) | (504 | ) | (269 | ) |   | (775 | ) |
| Stock-based compensation                   |   |   | 76 |  |   |   | 76 |  |
| Common stock issued under stock            |   |   |   |   |   |   |
|  plans and other, net                 | 8,912,573 |  | 1 |  | 302 |  |   |   | 303 |  |
| Tax benefit from stock plans               |   |   | 13 |  |   |   | 13 |  |
| Balance at December 31, 2011               | 319,615,965 |  | 32 |  | 43 |  | 4,384 |  | 16 |  | 4,475 |  |
| Comprehensive income:                      |   |   |   |   |   |   |
| Net earnings                               |   |   |   | 752 |  |   | 752 |  |
| Other comprehensive income                 |   |   |   |   | 30 |  | 30 |  |
| Total comprehensive income                 |   |   |   |   |   | 782 |  |
| Cash dividends declared                    |   |   |   | (284 | ) |   | (284 | ) |
| Repurchases of common stock                | (27,670,874 | ) | (3 | ) | (221 | ) | (834 | ) |   | (1,058 | ) |
| Stock-based compensation                   |   |   | 69 |  |   |   | 69 |  |
| Common stock issued under stock            |   |   |   |   |   |   |
|  plans and other, net                 | 3,703,236 |  | 1 |  | 118 |  |   |   | 119 |  |
| Tax shortfall from stock plans             |   |   | (9 | ) |   |   | (9 | ) |
| Balance at December 29, 2012               | 295,648,327 |  | $ | 30 |  | $ | — |  | $ | 4,018 |  | $ | 46 |  | $ | 4,094 |  |

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|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |
| Fiscal Year Ended                                                            | December 29, 2012 |   | December 31, 2011 |   | January 1, 2011 |
| OPERATING ACTIVITIES                                                         |   |  |   |   |  |   |   |
| Net earnings                                                                 | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |
| Adjustments to reconcile net earnings to net cash from operating activities: |   |  |   |   |  |   |   |
| Depreciation and amortization                                                | 284 |  |   | 296 |  |   | 244 |  |
| Amortization of debt discount (premium), net                                 | (11 | ) |   | (5 | ) |   | 1 |  |
| Inventory step-up amortization                                               | — |  |   | 30 |  |   | 9 |  |
| Stock-based compensation                                                     | 69 |  |   | 76 |  |   | 70 |  |
| Excess tax benefits from stock-based compensation                            | (1 | ) |   | (9 | ) |   | (17 | ) |
| Investment impairment charges                                                | — |  |   | — |  |   | 5 |  |
| Gain on sale of investments                                                  | (14 | ) |   | — |  |   | (5 | ) |
| Purchased in-process research and development charges                        | — |  |   | 4 |  |   | 12 |  |
| Deferred income taxes                                                        | (77 | ) |   | (65 | ) |   | (34 | ) |
| Other, net                                                                   | 106 |  |   | 78 |  |   | 17 |  |
| Changes in operating assets and liabilities, net of business acquisitions:   |   |  |   |   |  |   |   |
| Accounts receivable                                                          | 13 |  |   | (55 | ) |   | (123 | ) |
| Inventories                                                                  | 13 |  |   | 10 |  |   | 42 |  |
| Other current assets                                                         | 4 |  |   | 48 |  |   | (30 | ) |
| Accounts payable and accrued expenses                                        | 29 |  |   | 39 |  |   | 164 |  |
| Income taxes payable                                                         | 168 |  |   | 14 |  |   | 12 |  |
| Net cash provided by operating activities                                    | 1,335 |  |   | 1,287 |  |   | 1,274 |  |
| INVESTING ACTIVITIES                                                         |   |  |   |   |  |   |   |
| Purchases of property, plant and equipment                                   | (280 | ) |   | (307 | ) |   | (305 | ) |
| Business acquisition payments, net of cash acquired                          | — |  |   | — |  |   | (679 | ) |
| Proceeds from sale of investments                                            | 19 |  |   | — |  |   | 8 |  |
| Other investing activities, net                                              | (52 | ) |   | (30 | ) |   | (105 | ) |
| Net cash used in investing activities                                        | (313 | ) |   | (337 | ) |   | (1,081 | ) |
| FINANCING ACTIVITIES                                                         |   |  |   |   |  |   |   |
| Proceeds from exercise of stock options and stock issued                     | 119 |  |   | 302 |  |   | 152 |  |
| Excess tax benefits from stock-based compensation                            | 1 |  |   | 9 |  |   | 17 |  |
| Common stock repurchased, including related costs                            | (992 | ) |   | (809 | ) |   | (591 | ) |
| Dividends paid                                                               | (284 | ) |   | (205 | ) |   | — |  |
| Issuances of commercial paper borrowings, net                                | 321 |  |   | 247 |  |   | 26 |  |
| Borrowings under debt facilities                                             | — |  |   | 78 |  |   | 940 |  |
| Payments under debt facilities                                               | — |  |   | (78 | ) |   | (620 | ) |
| Other financing activities, net                                              | 22 |  |   | — |  |   | (10 | ) |
| Net cash used in financing activities                                        | (813 | ) |   | (456 | ) |   | (86 | ) |
| Effect of currency exchange rate changes on cash and cash equivalents        | (1 | ) |   | (8 | ) |   | — |  |
| Net increase in cash and cash equivalents                                    | 208 |  |   | 486 |  |   | 107 |  |
| Cash and cash equivalents at beginning of period                             | 986 |  |   | 500 |  |   | 393 |  |
| Cash and cash equivalents at end of period                                   | $ | 1,194 |  |   | $ | 986 |  |   | $ | 500 |  |
|                                                                         |   |   |   |   |   |
| Supplemental Cash Flow Information                                           |   |   |   |   |   |
| Cash paid during the year for:                                               |   |   |   |   |   |
|    Income taxes                                               | $ | 177 |  |   | $ | 203 |  |   | $ | 308 |  |
|    Interest                                                   | $ | 69 |  |   | $ | 68 |  |   | $ | 63 |  |
| Noncash investing activities:                                                |   |   |   |   |   |
|    Issuance of stock in connection with acquisition           | $ | — |  |   | $ | — |  |   | $ | 534 |  |

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|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |
|                   | December 29, 2012 |   | December 31, 2011 |
| Adjusted cost          | $ | 9 |  |   | $ | 9 |  |
| Gross unrealized gains | 32 |  |   | 30 |  |
| Fair value             | $ | 41 |  |   | $ | 39 |  |

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|                 |
|-----------------|
|                 |  |  |  |  |  |  |  |
|            | December 29, 2012 |   | December 31, 2011 |
| Finished goods  | $ | 416 |  |   | $ | 438 |  |
| Work in process | 50 |  |   | 54 |  |
| Raw materials   | 144 |  |   | 132 |  |
|            | $ | 610 |  |   | $ | 624 |  |

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|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |
|                           |   |   |   |
|                           | 2012 |   | 2011 |
| Balance at beginning of period | $ | 36 |  |   | $ | 25 |  |
| Warranty expense recognized    | 5 |  |   | 15 |  |
| Warranty credits issued        | (3 | ) |   | (4 | ) |
| Balance at end of period       | $ | 38 |  |   | $ | 36 |  |

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|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |
|                                        | 2012 |   | 2011 |   | 2010 |
| Numerator:                                  |   |   |   |   |   |  |
| Net earnings                                | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |
| Denominator:                                |   |   |   |   |   |  |
| Basic weighted average shares outstanding   | 313.3 |  |   | 324.3 |  |   | 328.2 |  |
| Effect of dilutive securities:              |   |   |   |   |   |  |
| Stock options                               | 1.3 |  |   | 2.6 |  |   | 2.3 |  |
| Restricted stock units                      | 0.2 |  |   | 0.2 |  |   | — |  |
| Diluted weighted average shares outstanding | 314.8 |  |   | 327.1 |  |   | 330.5 |  |
| Basic net earnings per share                | $ | 2.40 |  |   | $ | 2.55 |  |   | $ | 2.76 |  |
| Diluted net earnings per share              | $ | 2.39 |  |   | $ | 2.52 |  |   | $ | 2.75 |  |

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|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    |   | LightLab Imaging |   | AGA Medical |   | Total |
| Current assets                          |   | $ | 15 |  |   | $ | 97 |  |   | $ | 112 |  |
| Deferred income taxes, net              |   | 4 |  |   | 13 |  |   | 17 |  |
| Goodwill                                |   | 41 |  |   | 881 |  |   | 922 |  |
| Other intangible assets                 |   | 40 |  |   | 421 |  |   | 461 |  |
| Acquired IPR&D                      |   | 14 |  |   | 120 |  |   | 134 |  |
| Other long-term assets                  |   | 2 |  |   | 45 |  |   | 47 |  |
|    Total assets acquired |   | 116 |  |   | 1,577 |  |   | 1,693 |  |
|                                    |   |   |   |   |   |   |
| Current liabilities                     |   | 23 |  |   | 62 |  |   | 85 |  |
| Deferred income taxes, net              |   | — |  |   | 196 |  |   | 196 |  |
| Other long-term liabilities             |   | — |  |   | 236 |  |   | 236 |  |
| Net assets acquired                     |   | $ | 93 |  |   | $ | 1,083 |  |   | $ | 1,176 |  |
|                                    |   |   |   |   |   |   |
| Cash paid, net of cash acquired         |   | 93 |  |   | 549 |  |   | 642 |  |
| Non-cash (SJM shares at fair value)     |   | — |  |   | 534 |  |   | 534 |  |
| Net assets acquired                     |   | $ | 93 |  |   | $ | 1,083 |  |   | $ | 1,176 |  |

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |  |  |  |
|                                   | CRM/NMD |   | CV/AF |   | Total |
| Balance at January 1, 2011             | $ | 1,231 |  |   | $ | 1,725 |  |   | $ | 2,956 |  |
| AGA Medical                            | — |  |   | (3 | ) |   | (3 | ) |
| Foreign currency translation and other | 4 |  |   | (4 | ) |   | — |  |
| Balance at December 31, 2011           | 1,235 |  |   | 1,718 |  |   | 2,953 |  |
| Foreign currency translation and other | (6 | ) |   | 14 |  |   | 8 |  |
| Balance at December 29, 2012           | $ | 1,229 |  |   | $ | 1,732 |  |   | $ | 2,961 |  |

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|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        | December 29, 2012 |   | December 31, 2011 |
|                                        | GrossCarryingAmount |   | AccumulatedAmortization |   | GrossCarryingAmount |   | AccumulatedAmortization |
| Definite-lived intangible assets:           |   |  |   |   |  |   |   |  |   |   |  |
| Purchased technology and patents            | $ | 947 |  |   | $ | 336 |  |   | $ | 922 |  |   | $ | 276 |  |
| Customer lists and relationships            | 57 |  |   | 36 |  |   | 48 |  |   | 25 |  |
| Trademarks and tradenames                   | 22 |  |   | 10 |  |   | 24 |  |   | 8 |  |
| Licenses, distribution agreements and other | 6 |  |   | 4 |  |   | 6 |  |   | 4 |  |
|                                        | $ | 1,032 |  |   | $ | 386 |  |   | $ | 1,000 |  |   | $ | 313 |  |
| Indefinite-lived intangible assets:         |   |  |   |   |  |   |   |  |   |   |  |
| Acquired IPR&D                          | $ | 109 |  |   |   |  |   | $ | 120 |  |   |   |  |
| Trademarks and tradenames                   | 49 |  |   |   |  |   | 49 |  |   |   |  |
|                                        | $ | 158 |  |   |   |  |   | $ | 169 |  |   |   |  |

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             |   |   |   |   |   |   |   |   |   |   | After |
|                             | 2013 |   | 2014 |   | 2015 |   | 2016 |   | 2017 |   | 2017 |
|   Amortization expense | $ | 87 |  |   | $ | 85 |  |   | $ | 85 |  |   | $ | 85 |  |   | $ | 75 |  |   | $ | 229 |  |

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |
|                                        | December 29, 2012 |   | December 31, 2011 |
| 2.20% senior notes due 2013                 | $ | 454 |  |   | $ | 461 |  |
| 3.75% senior notes due 2014                 | 699 |  |   | 699 |  |
| 2.50% senior notes due 2016                 | 518 |  |   | 518 |  |
| 4.875% senior notes due 2019                | 496 |  |   | 495 |  |
| 1.58% Yen-denominated senior notes due 2017 | 95 |  |   | 104 |  |
| 2.04% Yen-denominated senior notes due 2020 | 149 |  |   | 164 |  |
| Yen-denominated credit facilities           | 76 |  |   | 83 |  |
| Commercial paper borrowings                 | 593 |  |   | 272 |  |
| Total debt                                  | 3,080 |  |   | 2,796 |  |
| Less: current debt obligations              | 530 |  |   | 83 |  |
| Long-term debt                              | $ | 2,550 |  |   | $ | 2,713 |  |

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|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |
|                         | December 29, 2012 |   | December 31, 2011 |
| Silzone legal accrual        | $ | 4 |  |   | $ | 22 |  |
| Silzone insurance receivable | $ | 3 |  |   | $ | 15 |  |

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|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                         | 2012 |   | 2011 |   | 2010 |
| Selling, general and administrative expense  | $ | 49 |  |   | $ | 55 |  |   | $ | 49 |  |
| Research and development expense             | 15 |  |   | 15 |  |   | 15 |  |
| Cost of sales                                | 5 |  |   | 6 |  |   | 6 |  |
|   Total stock compensation expense | $ | 69 |  |   | $ | 76 |  |   | $ | 70 |  |

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |  |  |  |
|                                | 2012 |   | 2011 |   | 2010 |
| Fair value of options granted       | $ | 7.71 |  |   | $ | 9.17 |  |   | $ | 11.79 |  |
| Assumptions:                        |   |   |   |   |   |
|   Expected life (years)   | 5.4 |  |   | 5.5 |  |   | 4.8 |  |
|   Risk-free interest rate | 0.7 | % |   | 0.9 | % |   | 2.2 | % |
|   Volatility              | 31.2 | % |   | 33.9 | % |   | 31.7 | % |
|   Dividend yield          | 2.5 | % |   | 2.0 | % |   | — | % |

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|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             |   |   |   |   | Weighted |   |   |
|                             |   |   | Weighted |   | Average |   | Aggregate |
|                             |   |   | Average |   | Remaining |   | Intrinsic |
|                             | Options |   | Exercise |   | Contractual |   | Value |
|                             | (in millions) |   | Price |   | Term (in years) |   | (in millions) |
| Outstanding at December 31, 2011 | 29.0 |  |   | $ | 38.51 |  |   |   |   |   |
|   Granted              | 4.5 |  |   | 35.38 |  |   |   |   |   |
|   Exercised            | (2.5 | ) |   | 36.35 |  |   |   |   |   |
|   Canceled             | (2.8 | ) |   | 40.05 |  |   |   |   |   |
| Outstanding at December 29, 2012 | 28.2 |  |   | $ | 38.05 |  |   | 4.8 |   | $ | 24 |  |
| Vested and expected to vest      | 27.1 |  |   | $ | 38.10 |  |   | 4.7 |   | $ | 24 |  |
| Exercisable at December 29, 2012 | 17.9 |  |   | $ | 38.88 |  |   | 3.6 |   | $ | 21 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |
|                                  |   |   | Weighted Average |
|                                  | Restricted Stock |   | Grant Date |
|                                  | (in millions) |   | Fair Value |
| Unvested balance at December 31, 2011 | 1.3 |  |   | $ | 38.01 |  |
| Granted                               | 0.8 |  |   | 35.42 |  |
| Vested                                | (0.3 | ) |   | 38.41 |  |
| Canceled                              | (0.2 | ) |   | 38.17 |  |
| Unvested balance at December 29, 2012 | 1.6 |  |   | $ | 36.61 |  |

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|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at December 31, 2011  | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Cost of sales special charges | 5 |  |   | 17 |  |   | — |  |   | 2 |  |   | 24 |  |
| Special charges               | 104 |  |   | — |  |   | 41 |  |   | 16 |  |   | 161 |  |
| Non-cash charges used         | — |  |   | (17 | ) |   | (41 | ) |   | (3 | ) |   | (61 | ) |
| Cash payments                 | (52 | ) |   | — |  |   | — |  |   | (7 | ) |   | (59 | ) |
| Foreign exchange rate impact  | 1 |  |   | — |  |   | — |  |   | — |  |   | 1 |  |
| Balance at December 29, 2012  | $ | 58 |  |   | $ | — |  |   | $ | — |  |   | $ | 8 |  |   | $ | 66 |  |

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|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | EmployeeTerminationCosts |   | InventoryCharges |   | FixedAssetCharges |   | Other Restructuring Costs |   | Total |
| Balance at January 1, 2011    | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Cost of sales special charges | 9 |  |   | 20 |  |   | 9 |  |   | 9 |  |   | 47 |  |
| Special charges               | 73 |  |   | — |  |   | 17 |  |   | 25 |  |   | 115 |  |
| Non-cash charges used         | — |  |   | (20 | ) |   | (26 | ) |   | (1 | ) |   | (47 | ) |
| Cash payments                 | (27 | ) |   | — |  |   | — |  |   | (15 | ) |   | (42 | ) |
| Foreign exchange rate impact  | (1 | ) |   | — |  |   | — |  |   | — |  |   | (1 | ) |
| Balance at December 31, 2011  | 54 |  |   | — |  |   | — |  |   | 18 |  |   | 72 |  |
| Cost of sales special charges | 11 |  |   | 13 |  |   | — |  |   | 20 |  |   | 44 |  |
| Special charges               | 27 |  |   | — |  |   | — |  |   | 31 |  |   | 58 |  |
| Non-cash charges used         | — |  |   | (13 | ) |   | — |  |   | (4 | ) |   | (17 | ) |
| Cash payments                 | (68 | ) |   | — |  |   | — |  |   | (47 | ) |   | (115 | ) |
| Foreign exchange rate impact  | 1 |  |   | — |  |   | — |  |   | (1 | ) |   | — |  |
| Balance at December 29, 2012  | $ | 25 |  |   | $ | — |  |   | $ | — |  |   | $ | 17 |  |   | $ | 42 |  |

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|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |
|                              | 2012 |   | 2011 |   | 2010 |
| Interest income                   | $ | 5 |  |   | $ | 4 |  |   | $ | 2 |  |
| Interest expense                  | (73 | ) |   | (70 | ) |   | (67 | ) |
| Other                             | (27 | ) |   | (30 | ) |   | (3 | ) |
| Total other income (expense), net | $ | (95 | ) |   | $ | (96 | ) |   | $ | (68 | ) |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |
|                         | 2012 |   | 2011 |   | 2010 |
| U.S.                         | $ | 316 |  |   | $ | 502 |  |   | $ | 553 |  |
| International                | 689 |  |   | 517 |  |   | 655 |  |
| Earnings before income taxes | $ | 1,005 |  |   | $ | 1,019 |  |   | $ | 1,208 |  |

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |  |  |  |  |  |  |  |  |  |
|                                              | 2012 |   | 2011 |   | 2010 |
| Current:                                          |   |   |   |   |   |
|   U.S. federal                          | $ | 236 |  |   | $ | 180 |  |   | $ | 264 |  |
|   U.S. state and other                  | 16 |  |   | 13 |  |   | 14 |  |
|   International                         | 78 |  |   | 65 |  |   | 57 |  |
|       Total current | 330 |  |   | 258 |  |   | 335 |  |
| Deferred                                          | (77 | ) |   | (65 | ) |   | (34 | ) |
| Income tax expense                                | $ | 253 |  |   | $ | 193 |  |   | $ | 301 |  |

----

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|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |
|                                             | 2012 |   | 2011 |
| Deferred income tax assets:                      |   |   |   |
| Net operating and capital loss carryforwards     | $ | 236 |  |   | $ | 164 |  |
| Tax credit carryforwards                         | 70 |  |   | 60 |  |
| Inventories                                      | 148 |  |   | 145 |  |
| Stock-based compensation                         | 78 |  |   | 73 |  |
| Compensation and benefits                        | 113 |  |   | 101 |  |
| Accrued liabilities and other                    | 133 |  |   | 117 |  |
|                                                  | 778 |  |   | 660 |  |
| Less: valuation allowance                        | (228 | ) |   | (157 | ) |
| Deferred income tax assets                       | 550 |  |   | 503 |  |
| Deferred income tax liabilities:                 |   |   |   |
| Unrealized gain on available-for-sale securities | (12 | ) |   | (11 | ) |
| Property, plant and equipment                    | (204 | ) |   | (207 | ) |
| Intangible assets                                | (307 | ) |   | (332 | ) |
| Deferred income tax liabilities                  | (523 | ) |   | (550 | ) |
| Net deferred income tax assets (liabilities)     | $ | 27 |  |   | $ | (47 | ) |

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |
|                                                    | 2012 |   | 2011 |   | 2010 |
| U.S. federal statutory tax rate                         | 35.0 |  % |   | 35.0 |  % |   | 35.0 |  % |
| Increase (decrease) in tax rate resulting from:         |   |   |   |   |   |
| U.S. state income taxes, net of federal tax benefit     | 0.5 |  |   | 1.2 |  |   | 2.2 |  |
| International taxes at lower rates                      | (12.1 | ) |   | (11.6 | ) |   | (10.0 | ) |
| Tax benefits from domestic manufacturer's deduction     | (2.2 | ) |   | (2.0 | ) |   | (1.1 | ) |
| Research and development credits                        | (1.1 | ) |   | (2.7 | ) |   | (2.4 | ) |
| Puerto Rico excise tax                                  | (1.8 | ) |   | (1.7 | ) |   | — |  |
| Non-deductible IPR&D charges                        | — |  |   | — |  |   | 0.4 |  |
| Settlement reserve for certain prior year tax positions | 4.6 |  |   | — |  |   | — |  |
| Other                                                   | 2.3 |  |   | 0.8 |  |   | 0.8 |  |
| Effective income tax rate                               | 25.2 |  % |   | 19.0 |  % |   | 24.9 |  % |

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|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |  |  |  |
|                                                                 | 2012 |   | 2011 |   | 2010 |
| Balance at beginning of year                                         | $ | 205 |  |   | $ | 163 |  |   | $ | 121 |  |
| Increases related to current year tax positions                      | 38 |  |   | 33 |  |   | 33 |  |
| Increases related to prior year tax positions                        | 90 |  |   | 16 |  |   | 19 |  |
| Reductions related to prior year tax positions                       | (18 | ) |   | (1 | ) |   | (9 | ) |
| Reductions related to settlements / payments                         | (1 | ) |   | (2 | ) |   | — |  |
| Expiration of the statute of limitations for the assessment of taxes | — |  |   | (4 | ) |   | (1 | ) |
| Balance at end of year                                               | $ | 314 |  |   | $ | 205 |  |   | $ | 163 |  |

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|         |                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------|
| • | Level 1 – Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities. |

|         |                                                                                                                                                                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 – Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. |

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|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | Balance SheetClassification | December 29, 2012 |   | Quoted PricesIn ActiveMarkets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |
| Assets                        |   |   |  |   |   |  |   |   |  |   |   |  |
| Money-market securities       | Cash and cash equivalents | $ | 964 |  |   | $ | 964 |  |   | $ | — |  |   | $ | — |  |
| Available-for-sale securities | Other current assets | 41 |  |   | 41 |  |   | — |  |   | — |  |
| Trading securities            | Other assets | 231 |  |   | 231 |  |   | — |  |   | — |  |
| Total assets                  |   | $ | 1,236 |  |   | $ | 1,236 |  |   | $ | — |  |   | $ | — |  |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                          | Balance SheetClassification | December 31, 2011 |   | Quoted PricesIn ActiveMarkets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |
| Assets                        |   |   |  |   |   |  |   |   |  |   |   |  |
| Money-market securities       | Cash and cash equivalents | $ | 745 |  |   | $ | 745 |  |   | $ | — |  |   | $ | — |  |
| Available-for-sale securities | Other current assets | 39 |  |   | 39 |  |   | — |  |   | — |  |
| Trading securities            | Other assets | 205 |  |   | 205 |  |   | — |  |   | — |  |
| Interest rate swap            | Other assets | 18 |  |   | — |  |   | 18 |  |   | — |  |
| Total assets                  |   | $ | 1,007 |  |   | $ | 989 |  |   | $ | 18 |  |   | $ | — |  |

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|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  | CRM/NMD |   | CV/AF |   | Other |   | Total |
| Fiscal Year 2012                      |   |  |   |   |  |   |   |  |   |   |  |
| Net sales                             | $ | 3,277 |  |   | $ | 2,226 |  |   | $ | — |  |   | $ | 5,503 |  |
| Operating profit                      | 2,185 |  |   | 1,241 |  |   | (2,326 | ) |   | 1,100 |  |
| Depreciation and amortization expense | 81 |  |   | 95 |  |   | 108 |  |   | 284 |  |
| Total assets                          | 2,347 |  |   | 2,974 |  |   | 3,950 |  |   | 9,271 |  |
| Fiscal Year 2011                      |   |  |   |   |  |   |   |  |   |   |  |
| Net sales                             | $ | 3,453 |  |   | $ | 2,159 |  |   | $ | — |  |   | $ | 5,612 |  |
| Operating profit                      | 2,145 |  |   | 1,144 |  |   | (2,174 | ) |   | 1,115 |  |
| Depreciation and amortization expense | 95 |  |   | 88 |  |   | 113 |  |   | 296 |  |
| Total assets                          | 2,412 |  |   | 3,093 |  |   | 3,613 |  |   | 9,118 |  |
| Fiscal Year 2010                      |   |   |   |   |   |   |   |
| Net sales                             | $ | 3,420 |  |   | $ | 1,744 |  |   | $ | — |  |   | $ | 5,164 |  |
| Operating profit                      | 2,125 |  |   | 968 |  |   | (1,817 | ) |   | 1,276 |  |
| Depreciation and amortization expense | 91 |  |   | 52 |  |   | 101 |  |   | 244 |  |
| Total assets                          | 2,150 |  |   | 3,097 |  |   | 3,319 |  |   | 8,566 |  |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales                 | 2012 |   | 2011 |   | 2010 |
| Cardiac rhythm management | $ | 2,854 |  |   | $ | 3,034 |  |   | $ | 3,040 |  |
| Cardiovascular            | 1,328 |  |   | 1,337 |  |   | 1,036 |  |
| Atrial fibrillation       | 898 |  |   | 822 |  |   | 708 |  |
| Neuromodulation           | 423 |  |   | 419 |  |   | 380 |  |
|                      | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |

|               |
|---------------|
|               |  |  |  |  |  |  |  |  |  |  |  |
| Net Sales     | 2012 |   | 2011 |   | 2010 |
| United States | $ | 2,594 |  |   | $ | 2,648 |  |   | $ | 2,655 |  |
| International |   |   |   |   |   |  |
| Europe        | 1,432 |  |   | 1,559 |  |   | 1,314 |  |
| Japan         | 665 |  |   | 641 |  |   | 553 |  |
| Asia Pacific  | 456 |  |   | 416 |  |   | 324 |  |
| Other         | 356 |  |   | 348 |  |   | 318 |  |
|          | 2,909 |  |   | 2,964 |  |   | 2,509 |  |
|          | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |

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|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |
| Long-Lived Assets | December 29, 2012 |   | December 31, 2011 |   | January 1, 2011 |
| United States     | $ | 1,036 |  |   | $ | 1,007 |  |   | $ | 966 |  |
| International     |   |  |   |   |  |   |   |
| Europe            | 82 |  |   | 84 |  |   | 86 |  |
| Japan             | 32 |  |   | 31 |  |   | 26 |  |
| Asia Pacific      | 82 |  |   | 81 |  |   | 74 |  |
| Other             | 193 |  |   | 185 |  |   | 172 |  |
|              | 389 |  |   | 381 |  |   | 358 |  |
|              | $ | 1,425 |  |   | $ | 1,388 |  |   | $ | 1,324 |  |

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|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | First |   | Second |   | Third |   | Fourth |   |
| (in millions, except per share amounts) | Quarter |   | Quarter |   | Quarter |   | Quarter |   |
|                                    |   |   |   |   |   |   |   |   |
| Fiscal Year 2012:                       |   |   |   |   |   |   |   |   |
| Net sales                               | $ | 1,395 |  |   | $ | 1,410 |  |   | $ | 1,326 |  |   | $ | 1,372 |  |   |
| Gross profit                            | 1,014 |  |   | 1,027 |  |   | 971 |  |   | 953 |  |   |
| Net earnings (a)                        | 212 |  | (b) | 244 |  |   | 176 |  | (c) | 120 |  | (d) |
| Basic net earnings per share            | $ | 0.67 |  |   | $ | 0.78 |  |   | $ | 0.56 |  |   | $ | 0.39 |  |   |
| Diluted net earnings per share          | $ | 0.67 |  |   | $ | 0.78 |  |   | $ | 0.56 |  |   | $ | 0.39 |  |   |
| Cash dividends declared per share       | $ | 0.23 |  |   | $ | 0.23 |  |   | $ | 0.23 |  |   | $ | 0.23 |  |   |
|                                    |   |   |   |   |   |   |   |   |
| Fiscal Year 2011:                       |   |   |   |   |   |   |   |   |
| Net sales                               | $ | 1,376 |  |   | $ | 1,446 |  |   | $ | 1,383 |  |   | $ | 1,407 |  |   |
| Gross profit                            | 1,011 |  |   | 1,051 |  |   | 1,013 |  |   | 1,004 |  |   |
| Net earnings (e)                        | 233 |  |   | 241 |  |   | 227 |  |   | 125 |  | (f) |
| Basic net earnings per share            | $ | 0.72 |  |   | $ | 0.73 |  |   | $ | 0.70 |  |   | $ | 0.39 |  |   |
| Diluted net earnings per share          | $ | 0.71 |  |   | $ | 0.72 |  |   | $ | 0.69 |  |   | $ | 0.39 |  |   |
| Cash dividends declared per share       | $ | 0.21 |  |   | $ | 0.21 |  |   | $ | 0.21 |  |   | $ | 0.21 |  |   |

|     |                                                                                                                                                                                                                                    |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | Restructuring activities resulted in after-tax special charges of $29 million for the first quarter, $27 million for the second quarter, $66 million for the third quarter and $75 million for the fourth quarter. |

|     |                                                                                                       |
|-----|-------------------------------------------------------------------------------------------------------|
| (b) | Includes after-tax special charges of $25 million related to a license dispute settlement charge. |

|     |                                                                                                |
|-----|------------------------------------------------------------------------------------------------|
| (c) | Includes after-tax special charges of $15 million for intangible asset impairment charges. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) | Includes after-tax special charges of $27 million related to IESD litigation and field action costs and after-tax charges of $11 million for intangible asset impairment charges and CATD inventory write-offs associated with discontinued product lines. Additionally, the Company recognized $46 million of additional income tax expense related to adjustments to uncertain tax positions associated with the effective settlement of certain income tax audits. |

|     |                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (e) | Restructuring activities resulted in after-tax special charges of $29 million for the second quarter, $21 million for the third quarter and $71 million for the fourth quarter. |

|     |                                                                                                                                                                                                     |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (f) | Includes after-tax special charges of $31 million for intangible asset impairment charges and $38 million of after-tax accounts receivable allowance charges for collection risk in Europe. |

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|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        |   | 2012 |   | 2011 |   | 2010 |   | 2009 |   | 2008 |   |
| Summary of Operations for the Fiscal Year:  |   |
| Net sales                                   |   | $ | 5,503 |  |   | $ | 5,612 |  |   | $ | 5,164 |  |   | $ | 4,681 |  |   | $ | 4,363 |  |   |
| Gross profit                                |   | 3,965 |  |   | 4,079 |  |   | 3,754 |  |   | 3,428 |  |   | 3,193 |  |   |
| Percent of net sales                        |   | 72.1 | % |   | 72.7 | % |   | 72.7 | % |   | 73.2 | % |   | 73.2 | % |   |
| Operating profit                            |   | 1,100 |  |   | 1,115 |  |   | 1,276 |  |   | 1,113 |  |   | 655 |  |   |
| Percent of net sales                        |   | 20.0 | % |   | 19.9 | % |   | 24.7 | % |   | 23.8 | % |   | 15.0 | % |   |
| Net earnings                                |   | $ | 752 |  |   | $ | 826 |  |   | $ | 907 |  |   | $ | 777 |  |   | $ | 353 |  |   |
| Percent of net sales                        |   | 13.7 | % |   | 14.7 | % |   | 17.6 | % |   | 16.6 | % |   | 8.1 | % |   |
| Diluted net earnings per share              |   | $ | 2.39 |  | (a) | $ | 2.52 |  | (b) | $ | 2.75 |  | (c) | $ | 2.26 |  | (d) | $ | 1.01 |  | (e) |
| Cash dividends declared per share           |   | $ | 0.92 |  |   | $ | 0.84 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   |
| Financial Position at Year End:             |   |
| Cash and cash equivalents                   |   | $ | 1,194 |  |   | $ | 986 |  |   | $ | 500 |  |   | $ | 393 |  |   | $ | 136 |  |   |
| Working capital (f)                         |   | 1,776 |  |   | 2,323 |  |   | 1,895 |  |   | 1,493 |  |   | 1,052 |  |   |
| Total assets                                |   | 9,271 |  |   | 9,118 |  |   | 8,566 |  |   | 6,426 |  |   | 5,723 |  |   |
| Total debt (g)                              |   | 3,080 |  |   | 2,796 |  |   | 2,512 |  |   | 1,922 |  |   | 1,202 |  |   |
| Shareholders’ equity                  |   | $ | 4,094 |  |   | $ | 4,475 |  |   | $ | 4,372 |  |   | $ | 3,325 |  |   | $ | 3,236 |  |   |
| Other Data:                                 |   |
| Diluted weighted average shares outstanding |   | 314.8 |  |   | 327.1 |  |   | 330.5 |  |   | 344.4 |  |   | 349.7 |  |   |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | 2012 diluted net earnings per share include after-tax special charges of $275 million related to the Company's realignment of its product divisions into two new operating divisions: the Cardiovascular and Ablation Technologies Division (CATD) (combining the legacy Cardiovascular and Atrial Fibrillation divisions) and the Implantable Electronic Systems Division (IESD) (combining the legacy Cardiac Rhythm Management and Neuromodulation divisions) and centralization of certain support functions ($122 million), ongoing restructuring actions in the Company's cardiac rhythm management business and sales and selling support organizations ($75 million), IESD litigation and field action costs ($27 million), a license dispute settlement charge ($25 million) and intangible asset impairment charges and inventory write-offs ($26 million). Additionally, the Company recognized $46 million of additional income tax expense related to a settlement reserve for certain prior year tax positions. See Notes to the Consolidated Financial Statements in the Financial Report for further detail. The impact of these items on 2012 net earnings was $321 million, or $1.02 per diluted share. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | 2011 diluted net earnings per share include after-tax special charges of $151 million related to restructuring activities ($121 million) and intangible asset impairment charges ($30 million) as well as after-tax IPR&D charges of $3 million. See Notes to the Consolidated Financial Statements in the Financial Report for further detail. The impact of these items on 2011 net earnings was $154 million, or $0.47 per diluted share. |

|     |                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (c) | 2010 diluted net earnings per share include after-tax special charges of $33 million, after-tax IPR&D charges of $12 million and an after-tax investment impairment charge of $5 million. See Notes to the Consolidated Financial Statements in the Financial Report for further detail. The impact of these items on 2010 net earnings was $50 million, or $0.15 per diluted share. |

|     |                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) | 2009 diluted net earnings per share include after-tax special charges of $76 million, an after-tax investment impairment charge of $5 million and after-tax IPR&D charges of $4 million. The impact of these items on 2009 net earnings was $85 million, or $0.25 per diluted share. |

|     |                                                                                                                                                                                                                                                                                           |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (e) | 2008 diluted net earnings per share include $319 million of after-tax IPR&D charges, after-tax special charges of $73 million and after-tax investment impairment charges of $8 million. The impact of these items on 2008 net earnings was $400 million, or $1.15 per diluted share. |

|     |                                                                                                                                                                                                                                                                                                                                                                |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (f) | Total current assets less total current liabilities. Working capital fluctuations can be significant based on the maturity dates of the Company’s debt obligations. The Company's current debt obligations included in current liabilities were $530 million (2012), $83 million (2011), $80 million (2010), $335 million (2009) and $76 million (2008). |

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|     |                                                                     |
|-----|---------------------------------------------------------------------|
| (g) | Total debt consists of current debt obligations and long-term debt. |

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|         |
|---------|
|         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|    |   | Fiscal Year |
|    |   | 2012 |   | 2011 |
| Quarter |   | High |   | Low |   | High |   | Low |
| First   |   | $ | 44.80 |  |   | $ | 34.23 |  |   | $ | 53.05 |  |   | $ | 40.14 |  |
| Second  |   | $ | 44.10 |  |   | $ | 34.82 |  |   | $ | 54.18 |  |   | $ | 46.01 |  |
| Third   |   | $ | 43.31 |  |   | $ | 35.57 |  |   | $ | 49.79 |  |   | $ | 35.42 |  |
| Fourth  |   | $ | 43.76 |  |   | $ | 30.25 |  |   | $ | 41.98 |  |   | $ | 32.13 |  |